Correlation Between Selvaag Bolig and Kmc Properties

Can any of the company-specific risk be diversified away by investing in both Selvaag Bolig and Kmc Properties at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Selvaag Bolig and Kmc Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Selvaag Bolig ASA and Kmc Properties ASA, you can compare the effects of market volatilities on Selvaag Bolig and Kmc Properties and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Selvaag Bolig with a short position of Kmc Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Selvaag Bolig and Kmc Properties.

Diversification Opportunities for Selvaag Bolig and Kmc Properties

0.33

Correlation Coefficient

Selvaag Bolig  Kmc Properties

Weak diversification

The 3 months correlation between Selvaag and Kmc is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Selvaag Bolig ASA and Kmc Properties ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kmc Properties ASA and Selvaag Bolig is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Selvaag Bolig ASA are associated (or correlated) with Kmc Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kmc Properties ASA has no effect on the direction of Selvaag Bolig i.e., Selvaag Bolig and Kmc Properties go up and down completely randomly.

Pair Corralation between Selvaag Bolig and Kmc Properties

Assuming the 90 days trading horizon Selvaag Bolig is expected to generate 188.02 times less return on investment than Kmc Properties. But when comparing it to its historical volatility, Selvaag Bolig ASA is 23.1 times less risky than Kmc Properties. It trades about 0.01 of its potential returns per unit of risk. Kmc Properties ASA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  4.80  in Kmc Properties ASA on December 29, 2024 and sell it today you would earn a total of  2.20  from holding Kmc Properties ASA or generate 45.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Selvaag Bolig ASA  vs.  Kmc Properties ASA

Selvaag Bolig ASA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Selvaag Bolig ASA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Selvaag Bolig is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Kmc Properties ASA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kmc Properties ASA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, Kmc Properties disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Selvaag Bolig and Kmc Properties

The main advantage of trading using opposite Selvaag Bolig and Kmc Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Selvaag Bolig position performs unexpectedly, Kmc Properties can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kmc Properties will offset losses from the drop in Kmc Properties' long position.

The idea behind Selvaag Bolig ASA and Kmc Properties ASA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Insider Screener module to find insiders across different sectors to evaluate their impact on performance.